UK supply-security study confident about gas imports

Uchenna Izundu
International Editor

LONDON, Oct. 29 -- The UK will have sufficient capacity in LNG terminals and natural gas pipelines to receive gas imports in the medium term, but price will determine if gas is sent to the country, a new government report concluded.

The report, developed with UK energy regulator Office of Gas & Electricity Markets (Ofgem), said LNG will play a crucial role in meeting the UK's gas needs along with pipeline gas as the country's indigenous supplies fall. "Further investment will be needed to avoid market tightness around the middle of the next decade and in subsequent years," the Department for Business, Enterprise, and Regulatory Reform said.

Use of coal, oil, and nuclear power is unlikely to be limited by resource availability, the report added, stressing that the UK could produce additional indigenous coal. Energy efficiency will be important to managing energy demand, particularly during peak periods.

However, planning delays could threaten the development of major energy projects along with the skills shortage in engineering and construction sectors to build new facilities.

Oil imports are likely to rise as domestic production wanes but present risks such as increased complexity of international routes as oil crosses more borders and resource nationalism. Transportation is expected to be the biggest consumer of oil products, while oil use by industrial and domestic consumers is expected to fall.

UK refiners face growth in demand for diesel and jet fuel and falling demand for gasoline. They must control quality of oil products and biofuels while either looking further abroad than they do now for high-quality crude or increasing investment in units enabling them to run lower-quality feedstock.

The government is confident it can access global oil supplies as UK imports increase because it has the relationships in place and an established refining industry.

Low-carbon generation
According to the report, carbon prices in the long term will attract investment in new, low-carbon power-generation capacity. "In the short term, however, uncertainty about the future of the carbon market may cause delays in investment in new generating capacity. This underlines the importance of an early and successful conclusion to discussions on Phase III of the European Union Emissions Trading Scheme, which is due to start in 2013," the report said.

Energy Minister Malcolm Wicks said it was crucial that the government not be complacent about delivering energy security. Around 14 Gw of new power-generation capacity is under consideration, and gas import capacity has quadrupled over the last few years. The report's publication coincides with news that nearly half of the country's nuclear power plants have not been working because of breakdowns and maintenance.

Jonathan Stern, director of gas research, Oxford Institute for Energy Studies, welcomed the report, stressing that it "covers a broader set of sectors and looks at security of supply from more dimensions." Stern said the consultative aspect ensured that a broad range of information was gathered to evaluate future scenarios in energy markets.

Renewable sources are expected to play an important role in meeting the power shortfall, though by how much is unclear.

Separately, Wicks indicated on Oct. 23 that the government would scale down its aspiration to source 20% of Britain's energy supply from renewables by 2020. Leaked documents reported in the national press said there were great practical difficulties in implementing the goal. The target is likely to be up to 15% instead, and Wicks said it did not mean that the UK was rejecting the EU-wide target of 20% by the same date.

Contact Uchenna Izundu at uchennai@pennwell.com.

Related Articles

Mangalore refinery reports steady operations following expansion

02/13/2015 Operations are proceeding smoothly at Mangalore Refinery & Petrochemicals Ltd.’s (MRPL) refinery in Mangalore, India, following the recent comp...

Omsk refinery hits target for Euro 5 diesel output

02/12/2015 JSC Gazprom Neft has switched to the exclusive production of Euro 5-standard diesel fuels at its 21.4 million-tonne/year Omsk refinery in Western S...

Bakken formation pressure standards to take effect Apr. 1

02/10/2015 North Dakota oil and gas regulators ordered operators to condition crude oil from the Bakken, Three Forks, and Sanish formations, effective Apr. 1,...

USW union workers add two BP refineries to strike list

02/09/2015 Union workers at two BP PLC-owned refineries in Indiana and Ohio have joined the United Steelworkers union’s (USW) unfair labor practice (ULP) stri...

Chevron details scheduled maintenance for Cape Town refinery

02/09/2015 Chevron South Africa (Pty.) Ltd., a subsidiary of Chevron Corp., has reported it will begin one of the biggest routine maintenance and safety inspe...

Union strike under way at US refineries, petchem plants

02/09/2015 The United Steelworkers Union (USW) has instituted a strike at nine US refining and petrochemical production plants following a breakdown in negoti...

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

Union strike ongoing at US refineries as negotiations continue

02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue...

Goodlatte reintroduces bills to repeal, reform RFS

02/05/2015 Calling it “a true ‘kitchen table’ issue,” US Rep. Bob Goodlatte (R-Va.) reintroduced a pair of bills to address problems in the federal Renewable ...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected